Key points of investment:
Historical issues have been clarified in a concentrated manner. 1) In 2022, the company achieved operating income of 47.921 billion yuan, a year-on-year decrease of 29.32%, and net loss attributable to shareholders of listed companies was 461 million yuan, a year-on-year decrease of 274.81%.
The company's gross margin in 2022 was 16.62%, down 3.20 percentage points from 2021. Among them, the company's real estate development business settlement gross margin was 16.13%, down 3.54 percentage points from 2021. 2) In the first quarter of 2023, the company achieved operating income of 3.635 billion yuan, an increase of 54.91% over the previous year, and net loss attributable to shareholders of listed companies was 945 million yuan. The company's gross margin for the first quarter of 2022 was 14.10%, down 15.94 percentage points from the same period in 2021.
Sales rankings have improved markedly, and land resources have formed a pattern. 1) According to full-caliber statistics, the company completed a sales area of 3.18 million square meters in 2022, with a contract amount of 87 billion yuan and sales repayment of 104.7 billion yuan. The contract amount has increased significantly in the sales rankings of many third parties. In the first quarter of 2022, the company achieved a total contract area of 741,900 square meters, an increase of 16.54% over the previous year; the contract amount was 17.747 billion yuan, a year-on-year decrease of 12.01%. 2) By the end of 2022, the company plans to sell and is selling nearly 170 major projects (including self-owned), with a total construction area of over 46 million square meters, of which nearly 20 million square meters are currently under construction, and more than 15.5 million square meters of unsold area at the end of 2022. Judging from the regional layout, three major regions have been formed: the Beijing region (the Beijing-Tianjin-Hebei region centered on Beijing), the northern area, and the southern area. Among them, the Beijing region (Beijing-Tianjin-Hebei) currently has 82 major projects, with a total scale of nearly 19 million square meters.
The size of interest-bearing debt has declined, and the three red line indicators have improved. A total of 41,677 billion yuan was added to debt financing in 2022, including 12.377 billion yuan in development loans, 3.8 billion yuan in trusts, 760 million yuan in debt protection plans, 24.4 billion yuan in bond issuance, and 340 million yuan in merger and acquisition loans; the cumulative repayment of maturing liabilities was about 51,537 billion yuan, the scope of consolidation was reduced by 2,294 billion yuan, and the size of the company's interest-bearing debt decreased by 12.154 billion yuan compared to the beginning of the year. By the end of 2022, the company's balance ratio after excluding prepaid accounts was 70.50%, the net debt ratio was 147.28%, and the short-term cash debt ratio was 1.03 times.
The derivative business is developing in an orderly manner. By the end of 2022, the company had achieved a leased area of 1.09 million square meters of property, a commercial property management area of 153,000 square meters, and sales of 174,000 hotel rooms per day. In 2022, the company's hotel property operation and other settlement revenue was 636 million yuan, and settlement costs were 489 million yuan. At the end of 2022, the company's urban renewal project made phased progress; long-term rental apartments were promoted under the “First Kaileshang” brand, and various projects in and outside Beijing continued to enter the market. Among them, the Daxing, Mentougou, and Hangzhou projects were nearing full rent; the pension project opened new stores; and cultural investment cultural and creative projects operated steadily.
Investment advice: Maintain a “better than the market” rating. We expect the company's net assets per share to be RMB 10.90 and RMB 11.16 for 2023-2024. As of April 28, the company closed at $4.47. We gave the company a 0.6-0.7X2023 PB valuation, corresponding to a reasonable value range of 6.5 to 7.63 yuan, maintaining the “superior market” rating. Risk warning: The industry faces downside risks.